Ben Wise on Branding

Watching the world through the lens of the brand

Getting the Most from Brand Extensions

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For the past few months I have been working with a client on evaluating a brand extension opportunity. Whenever someone mentions this topic, marketers immediately start talking about ‘fit’ – how well the new category fits with the attributes of the existing brand.

For example, if a company makes pencils, extending the brand into erasers would be a good fit. While it is rarely this simple, the concept of fit in brand extensions is pretty straightforward and can easily be confirmed with some basic consumer research.

There are two deeper strategic questions that need to be included when evaluation a brand extension:

  1. Does the extension category align with the strategic path that the brand is on?
  2. Would a successful product in the extension category add value to the master brand?

Alignment with the Strategic Path

Few brands are able to survive selling the same product forever. Brands usually need to extend themselves into new markets to allow for growth. Each individual extension of the brand is one step along this path. Thus, when evaluating your next step you must understand the longer path that your brand is on.

For example, before the iPod, Apple just sold computers. Extending to portable music players was a good fit because their laptops already provided portable devices that emphasized creativity. But at this time, jumping from laptops to cell phones would have been a step too far. Once the iPod had become successful, the overall Apple brand included small, handheld devices allowing them to further extend in this space – hence the iPhone.

The same could be said for the iPad. Jumping from an iPod to an iPad would have been too much of a stretch, but having the iPhone and iTouch in between made a tablet product a logical next step. Each new Apple product is the logical next step that also paves the way for the step after that.

Enhancing the Master Brand

Brand extensions can be loosely placed into two groups: those that dilute the master brand and those that enhance it. If Heinz launched a 58th flavor of ketchup it would dilute the brand. The Heinz master brand doesn’t improve but it is now spread across more product.

Using the Apple example again, each brand extension enhanced the overall Apple brand and each new product was a step on the path toward creating a master brand about lifestyle entertainment. The launch of the iPhone improved the brand for iPods and laptops too.

What do you think? Is fit enough for brand extensions or should brands seek more value?


Written by benwisebranding

April 12, 2010 at 8:18 pm

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